Perception of control is a big benefit of home ownership

This week’s headlines for the housing industry could be last month’s, last year’s or yesterday’s — “No sign of slowdown,” “Hot housing market to slow next year,” “Buyers tread cautiously.” They could just as easily say, “Lacking crystal ball, most people don’t know what the heck is going to happen in the housing market, ever.”

What we do know, though, is that housing is about far more than fluctuating prices; much more, even, than your own roof, walls and fireplace, as Jimmy Stewart puts it in the holiday classic It’s a Wonderful Life.

Home ownership has psychological ramifications that, I think, drive people to buy far more predominantly than, say, low interest rates. I believe home ownership is still the single best way for the average person to build wealth. It improves neighbourhoods, as owners tend to take better care of their properties than renters, and it’s a great way for those who aren’t good at saving to save.

Evidence says most people agree with me; in its most recent survey (which uses data from 2011, although the report was released this fall) StatsCan says that of all the households in Canada where two adults reside (“couples families”), more than 80% own the homes they live in. Overall, Canadian home ownership jumped up to then nearly-70% level in the 2000s versus the 1990s. Housing now accounts for nearly a third of our GDP.

The intangible benefits of home ownership on physical and psychological health are well researched. They’ve been shown to include civic participation (including voting), increased charity, higher student test scores, lower teen pregnancy, better health outcomes, and less likelihood of being victimized by crime — and that’s just a partial list.

There are some arguments against home ownership, certainly. Some say it makes us less likely to move where new jobs are being created, which contributes to labour imbalances (ironically, it’s often the building industry that creates the new jobs for which we may be reluctant to move).

Some studies suggest high home ownership levels discourage business start-ups, partly through risk aversion and partly through the NIMBY attitude that we don’t want commercial zoning where we live.

Increased debt and worrying about the market can cause anxiety. A 2013 Conference Board of Canada report says about 20% of home owners qualify as house poor, spending more than 30% of their pre-tax income on housing. Maybe their kids have to give up extra-curricular sports, they don’t get “date night” anymore and maybe they don’t even eat as well. Home ownership as a gilded cage of sorts.

So with home prices showing few signs of falling, should we still be pursuing home ownership as such a big part of the Canadian dream? I say yes (and although it’s dusty, I do have a psychology degree backing me up here). Perhaps the biggest plus about home ownership is that you have control, and that alone has a deep positive effective on your psyche.

Look back at times in your life when you felt out of control and ask yourself how it impacted your health and your relationships. When you own a home, you never have to worry that the landlord will sell it out from under you. Just being able to paint the living room whatever colour you darn well please has positive effects. Since it’s yours, you have control over the circumstances that surround it, and unless you’re hit by some very bad luck (bad decisions are, again, within your control), it can’t be taken from you.

Studies show that the perception of control plays a critical role in our psychological and physical well-being. It has even been found to have positive effects on the adjustment to and coping with various physical problems including AIDS and cancer.

It often seems like all that swirls around us is beyond our control, but home ownership allows us to have control over at least a few of the details, even if they’re just a roof, four walls and a fireplace.